Damages should reflect defendant’s non-opposition in real world

Intellectual Property - Patents - Transfer of interest

Defendant brought unsuccessful prohibition proceeding with respect to plaintiff’s generic version of its patented pain medication. After receiving Notice of Compliance (NOC) allowing it to market generic version, plaintiff brought action against defendant for damages for sales allegedly lost during period of time it was kept off market. Defendant alleged that plaintiff was not entitled to damages because hypothetical sales of its generic drug would have infringed defendant’s patent and that this improper conduct of patent infringement fell within doctrine of ex turpi causa. Plaintiff brought motion seeking summary trial on whether defendant’s defence of ex turpi causa was relevant to assessment of damages. Motion granted. Case law did not support defendant’s position that its failure to bring infringement action to enforce its claimed exclusive rights did not diminish its legal position. Infringement was factor that could and should be taken into account in assessing quantum of damages, but only where it was undisputed or had been asserted and proved. Otherwise, infringement was not relevant as but-for world should reflect what happened in real world to extent possible. Defendant’s non-opposition to plaintiff’s entry into market in real world should be reflected in calculation of damages owed to plaintiff in but-for world, such that, in hypothetical world, plaintiff would not have been prevented from marketing and selling its product. Defence of ex turpi causa by reason of infringement was not legally viable to issue of calculation of plaintiff’s damages from being excluded from market, and so summary trial was appropriate.

Pharmascience Inc. v. Pfizer Canada ULC (2019), 2019 CarswellNat 5654, 2019 CarswellNat 5655, 2019 FC 1271, 2019 CF 1271, James W. O'Reilly J. (F.C.).

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